[OPE-L] [Jurriaan on] The globalisation of Western Europe's vegetables

From: glevy@PRATT.EDU
Date: Sun Oct 02 2005 - 18:26:55 EDT

---------------------------- Original Message ----------------------
Subject: The globalisation of Western Europe's vegetables
From:    "Jurriaan Bendien" <adsl675281@tiscali.nl>
Date:    Sun, October 2, 2005 5:48 pm


While clearing out some papers, I found an issue of the Dutch Foreign
Affairs ministry's "International Cooperation" journal (Internationale
Samenwerking, May 2005 issue, p. 19) which contains some stats that might
still be of interest to readers. The stats concern the market share of
developing countries in the imports of vegetables into the current EU and
Norway, and the source cited is http://www.cbi.nl/. The figures are as

bananas - 23% from Guatemala, 23% from Ecuador
avocado's - 55% from South Africa
papaya's - 72% from Brazil
lemons - 58% from Argentina
tamarinde - 75% from Madagascar
cherries - 85% from Turkey
dates - 66% from Tunesia
passion fruit - 51% from Malaysia
figs - 71% from Turkey
peas & beans - 37% from Kenya
capers - 96% from Turkey
aubergines - 72% from Turkey
artichokes - 95% from Egypt
corn/maize - 72% from Thailand
tomatoes - 85% from Morocco
courgettes - 66% from Morocco
truffles - 88% from China

However, the fraction of vegetables imported from developing countries in
total vegetables imported by the EU countries is generally a little over
10% on average, except for for Spain where it's one-third, and France (a
quarter). Germany imports very little vegetables and fruit from developing
countries. Most of the export and import of vegetables by value occurs
within the EU itself.

You might wonder, what is the proportion of imported fruits sourced from
developing countries in total fruit imports? For Holland, it's 55%, Italy
47%, Britain 45%, Spain 45%, Norway 42%, France 26% and Germany 16%. In
Northern Europe, except Germany and France, close to half of imported fruit
is sourced from developing countries.

Data is also provided on the same page for the average cost structure for
the final market price of a kilogram of commercially produced bananas
imported into Western Europe:

Producers income 7%
Export costs 6%
International transport costs 13%
20% gross profit
13% tax levy
41% distribution costs

The cost structure of "third world friendly" bananas is not really all that
different, except that the producers get 14% (i.e. their share of the final
price doubles), the profit margin to others is reduced, and the tax levy
rises to 17%. As you can see from the data, there must be a massive
difference between the producer's production price, and the final
production price. Transport and distribution costs (wholesale and retail)
represent about half of the final selling price. The true "physical"
production, transport, packaging and storage cost is likely to be perhaps
a quarter of the final selling price (for more references, see e.g. the
FAO document at
In Britain, consumption of bananas grew by 87% over the period 1990 to 2000
( http://www.igd.com/CIR.asp?menuid=35&cirid=122The general trend though is for the average consumption of fresh vegetables
per person to decline.

I do not know exactly how the figures cited above are computed, but as you
can see, the "Marxian surplus-value" obtained with respect to a kilogram of
commercially exported bananas must be somewhere around a third (or possibly
even half) of the final selling price, i.e. a  final unit profit rate on a
bunch of bananas of at least 33% or so, shared out between producers,
rentiers, transporters, creditors, distributors and government. So at least
as important as, or more important than who "produces" the bananas, is who
"owns" the bananas. This unit profit rate should, of course, not be
confused with the return on capital invested in the banana industry, or
the profit margin on total sales, which will be less (you can see that in
the financial statements of Chiquita, Fyffes etc).

All of this though illustrates, how "globalisation" implies greater market
intermediation between producers and consumers, the effect being that the
proportion of profit income realised by that market intermediation (in
contrast to direct production income) increases.

Von Bohm Bawerk talked about the "roundabout way of production", but we
have to consider also the "roundabout way of circulation". Unsurprisingly,
then, the total value of goods traded in the world market rises much
faster than GDP (although this obviously has also many other causes). This
intermediation (circulation costs) itself feeds into the value-added
calculation, to the extent that e.g. distributors gross profit & wage
income statistically "adds value" to the bananas.

From the point of view of an ecologist, the whole story might of course
seem like a bit of a nightmare, to the extent that increasing amounts of
energy are used to bring vegetables to the final consumer, the vegetables
are in many cases less fresh, and even then the consumer actually consumes
less of them, with its effect on the long-term health of the population.

To finish, a quote from President Bush: "...Americans should... eat a
nutritious diet. That means at least five fruits or vegetables a day. I've
got a little work in my family. We've been working on the old - well, been
working on number 41 to eat broccoli for all these years. (Laughter.) But
it's good advice."



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